Requirement 1. Compute spending and efficiency variances for MDF's variable overhead in May 2014. Begin by calculating the following amounts for the variable overhead. (Round your answer to the nearest dollar.) Variable OH Actual input Actual costs incurred Flexible budgeted rate budget Now compute the spending and efficiency variances using the amounts you calculated above. (If no variance exists leave the dollar value blank. Label the variance as favorable (F), unfavorable (U) or never a variance (N).) Variable OH Spending Variance Efficiency Variance Requirement 2. Compute the spending variance and production-volume variance for MDF's fixed overhead in May 2014. Begin by determining the formula then computing the fixed OH cost per hour of delivery time. (Round your answer to the nearest dollar.) Fixed OH cost per hour of delivery time Now calculate the following amounts for the fixed overhead. Fixed OH Actual costs incurred Same budgeted lump sum regardless of output level Allocated overhead Now compute the spending variance and production-volume variances using the amounts you calculated above. (If no variance exists leave the dollar value blank. Label the variance as favorable (F), unfavorable (U) or never a variance (N).) Fixed OH Spending Variance Production-Volume Variance Requirement 3. Comment on MDF's overhead variances and suggest how Jason Clark might manage MDF's variable overhead differently from its fixed overhead costs. The variable overhead spending variance is and the fixed overhead spending variance is This means that MDF had over budget in either or both the cost of individual items in the overhead cost pools, or the usage of these individual items per unit of the allocation base (delivery time). The efficiency variance for variable overhead costs results from use of the cost allocation base each delivery takes hours versus a budgeted 0.70 hours. (Round your answer to two decimal places, "XXX".) MDF can best manage its overhead costs by long-term planning of capacity rather than day-to-day decisions. For daily monitoring of the use of individual items is required to manage costs efficiently. overhead, a mix of long-run planning and The production-volume variance for overhead costs arises because MDF has unused overhead resources that it may seek to reduce in the long run. Meal Delivery Fast (MDF) operates a meal home-delivery service. It has agreements with 20 restaurants to pick up and deliver meals to customers who place orders on MDF's website. MDF allocates variable and fixed overhead costs on the basis of delivery time. MDF's owner, Steve Roberts, obtains the following information for May 2017 overhead costs: (Click the icon to view the information.) Read the requirements. Requirements 1. Compute spending and efficiency variances for MDF's variable overhead in May 2017. 2. Compute the spending variance and production-volume variance for MDF's fixed overhead in May 2017. 3. Comment on MDF's overhead variances and suggest how Steve Roberts might manage MDF's variable overhead differently from its fixed overhead costs. Actual Static Meal Delivery Fast (May 2017) Results Budget Output units (number of deliveries) 8,300 12,500 Hours per delivery 0.70 Hours of delivery time 5,680 Variable overhead cost per hour of delivery time $ 1.50 Variable overhead costs Fixed overhead costs $ 10,224 $ 39,500 $ 35,000